Concurrently, the Dow Jones Industrial Average, which had reached a record high at the end of the previous year, climbed by 360 points, or 1%. The Nasdaq Composite also advanced by 1.1%, and the Nasdaq-100, known for its focus on smaller, tech-centric companies, increased by 1.4%, reaching a new record as well.
All three major U.S. stock indexes have now moved into positive territory for the year 2024, with the Dow turning positive during Friday's surge. This marks a significant recovery for the S&P 500, which had experienced a 19% decline in 2022. In 2023, the index rallied impressively with a 24% gain, buoyed by an economy that avoided a recession and an easing of inflation, allowing the Federal Reserve to halt interest rate hikes. The market rally had paused briefly at the beginning of 2024 as investors took profits from major tech companies like Apple.
This return to buying, especially in technology stocks, has solidified the market's status in a bull market that began in October 2022, as opposed to a mere bounce in a bearish phase. Since the low in October 2022, the S&P 500 has surged over 34%.
Matt Stucky, chief portfolio manager at Northwestern Mutual Wealth Management, commented on the trend, observing the strong market leadership of companies excelling in AI and unique tech offerings. He also highlighted the crucial role of the Federal Reserve in maintaining this growth momentum through 2024, noting that the growth in 2023 was driven more by multiples rather than earnings.
Further boosting market sentiment, fresh consumer data revealed on Friday showed a significant increase in consumer confidence regarding the economy and inflation. The University of Michigan’s Survey of Consumers reported a 21.4% year-over-year increase, reaching its highest level since July 2021.
In individual stock news, insurance company Travelers saw its shares rise by more than 5% following an earnings beat. Schlumberger also gained nearly 2% after exceeding expectations on both revenue and earnings. Meanwhile, Ally Financial's stock surged over 10% after reporting strong quarterly results and announcing the sale of a business unit to Synchrony Financial.
In the medical technology sector, Inspire Medical Systems experienced a notable boost. Shares of the company, which sells a device for treating obstructive sleep apnea, have risen more than 36% from a 52-week low set in mid-November. Analysts at Jefferies anticipate over 26% potential growth for the stock, having initiated it at a buy with a price target of $245. This optimism is based on the company's continued performance and growing awareness of its product, coupled with diminishing concerns over the impact of anti-obesity medications like Ozempic on its market. Inspire's shares were up more than 2% in Friday's trading.
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